AASMP: Azerbaijan's stock market uses just small part of its potential

By  Trend

The securities market of Azerbaijan uses only a small part of its potential, Chairman of Managerial Board of Association of Azerbaijani Stock Market Participants (AASMP) Jeyhun Ibrahimov believes.

"The potential of the securities market of Azerbaijan is quite high, which, in particular, is confirmed by the demand for notes issued in recent years [by the Central Bank] and government bonds," Ibrahimov told Trend Aug. 21, adding that the market has the necessary infrastructure, a modern trading system, potential investors and sufficient profitability.

Ibrahimov cited the issue of bonds by the Azerbaijani state company SOCAR in 2016, as well as the subsequent successful placement of bonds of Met-AK company, Unibank and the planned issue of bonds by the investment company Invest-AZ as successful examples of placement of securities on the stock market of the country.

"All this indicates that the stock market of the country has sufficient potential. Now we use just a small part of this potential, and in order to use it at full capacity, it is necessary to ensure transparency and accountability of companies, and only then to work on attracting new investors," he said.

The head of AASMP also spoke about the demand for foreign securities in Azerbaijan. According to him, Azerbaijani investors are more interested in shares of foreign companies than local ones. Ibrahimov believes that the main reason for this is the lack of information about the shares of local companies.

"Both local and foreign information resources provide much more information about the shares of foreign companies than about the shares of local companies. Despite the fact that the System of Electronic Information Disclosure (MEAS) has been operating in Azerbaijan since 2015, very few people know about its existence. Meanwhile, the information disclosure system is the basis of the stock market of any country", Ibrahimov said.

In January-July 2018, the total turnover of exchange transactions over all the tools on the Baku Stock Exchange (BSE) has exceeded 13 billion manats (an increase by 2.4 times over the year).

The volume of the government securities market amounted to 6.58 billion manats (growth by 4.1 times over the year), the turnover of the corporate securities market – to 1.01 billion manats (a decrease by 12.2 percent), and the volume of the derivative instruments market – to 5.42 billion manats (growth by 2.1 times).